BAKSHISH SINGH versus M/S DARSHAN ENGINEERING WORKS & ORS.

Citation: [1993] SUPP. 3 S.C.R. 178 · Decided: 11-10-1993 · Supreme Court of India · Bench: P.B. SAWANT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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BAKSHISH SINGH 
v. 
M/S DARSHAN ENGINEERING WORKS & ORS. 
OCTOBER 11, 1993 
[P.B. SAWANT AND YOGESHWAR DAYAL, JJ.] 
Constitution of India-Arlicle 19( 1 )(g}-A period of 5 years as qualify-
ing service for getting the gratuity prescribed under section 4( 1) (b) of the Pay-
ment of Gratuity Act-Whether violative of-Held-No. 
Service Law-Payment of Gratuity Act, 1972-Development and chan-
ges in the concept of Gratuity-Factors to be considered while fu:ing it-En-
titlement under S. 4( 1 )(b }-Whether unreasonable and violative of Art. 
19( 1 )(g)-Need for central legislation on gratuity and the object and ambit of 
Payment of Gratuity Act 1972. 
The Appella!lt joined the service of the resp. employer as a 'fitter' on 
2nd March 1968 when his age was 54 years and 3 months; and he resigned 
from service on 10th Dec. 1978 after a total period of continuous service 
of more than 10 years, his last drawn wages being Rs. 335 p.m. In the 
meanwhile the Payment of Gratuity Act, 1972 came into force on 21st Sept. 
1972. After giving resignation w.e.f. 10th Dec 1978, the appellant claimed 
gratuity under section 4(l)(b) of the Act which was rejected by the respon-
dent company. The Controlling Authority under section 7 of the Act 
allowed his claim, and calculated the amount of gratuity due to the 
appellant as Rs. 1782 at the rate of 15 days wages per year of service for 
all the 10 years taking the last drawn wages of Rs. 335 p.m. as the basis of 
the calculation. The respondent-employer challenged it before the Appel-
late Authority who dismissed the Appeal, whereafter a writ petition under 
Articles 226 & 227 of the Constitution was preferred by the respondent 
· employer in the High Court. 
The High Court confirmed the interpretation adopted by the 
statutory Authorities of S.4(1) namely that all the three Clauses (a), (b) & 
(c) thereof are independent of each other. It, however, held S.4(1) (b) of the 
Act which entitles an employee to gratuity on his retirement of resignation 
after a continuous service of 5 years - as an unreasonable restriction on 
H the employer's right to carry on his business and, therefore violative of Art. 
178 
B. SINGH v. ENGG. WORKS 
179 
19(1) (g) of the Constitution. The High Court also denied the gratuity A 
awarded to the appellant by the Authorities. 
Against the High Court judgment two appeals • one by the Union of 
India and other by the aggrived employee ·were preferred. 
Allowing the appeals, this court 
HELD : 1. Article 19(1) (g) of the Constitution of India comes into 
picture only if, among others, [a] it is shown that the short qualifying 
period of service throws on any particular employer such financial burden 
as would force him to close his establishment and [b] the provision is not 
B 
one of the minimum service conditions which must be made available to the C 
employees. Hence, the provision for a short qualifying period per se is not 
invalid and cannot be struck down generally as being violative of Article 19 
(1) (g) of the Constitution. (194-E-F] 
Gannent cleaning works v. Its Workmen, (1962) 1 SCR 711, followed. 
Express Newspapers v. Union of India & Ors., (1959) SCR 12, ex· 
plained & distinguished. 
U. Unichoyi & Ors. v. The State of Kerala, (1962) 1 SCR 946, relied on. 
D 
Management of Wenger & Co. v. Their Workmen, (1963) Supp. 2 SCR E 
862 and Mis British Paints (India) Ltd. v. Its Wrokmen, (1966) 2 SCR 523, 
referred to. 
2. In dealing with the financial obligation involved on account of the 
introduction of the gtratuity s<:heme, it was necessary to bear in mind the 
actual rather than the theoretical impact of the Scheme. Since not more F 
than 3 to 4 percent of the employees retired every year, the financial burden 
caused by the gratuity scheme was much less than what its theoretical 
enunciation would indicate. (195-B·C] 
Management of Wenger & Company v. Their Workmen, (1963) supp. 2 
SCR 862; Straw Board Manufacturing Company Ltd. v. Their Workmen, G 
[1977) 3 SCR 1991, relied upon. 
Delhi Cloth & General Mills Ltd. v. Their Workmen & Ors. etc., (1969) 
2 SCR207, referred to. 
3. It cannot be disputed that the Payment of Gratuity Act is a welfare H 
180 
SUPREME COURT REPORTS [1993] SUPP. 3 S.C.R. 
A 
measure introduced in the interest of the general public to secure economic 
justice to workmen and to assist them in their old age and to ensure them 
a decent standard of life on their retirement. (202-H, 203-A] 
4. On both grounds, viz
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